L'informaticien: Pricing in Real Time

June 1, 2015-

By Emilien Ercolani

If the term Big Data, or megadonnées in French, becomes increasingly familiar, it’s because we are entering a period where companies begin to detect its first profits. In the area of sales and optimization of pricing, examples are also quite revealing.

What is in order to detect potential data, a company had to start by talking about football? This is perhaps one of the most striking examples of the phenomenon. Do you know Michu? Purchased by Swansea club for 2.5 million euros, this then anonymous Spanish player in the midfielder position first missed success upon his arrival in England. It is based on the huge data clusters that Coach Gary Monk had on the player that the team is evolving: Michu now plays at the forefront of the attack, where he scored 17 goals in 35 games in the first year of his arrival. It’s a revelation say some, pure logic and simple retort say others: with statistics shown, Michu was a born goal scorer. It was enough to read into… with the right data.

Michu (real name Miguel Pérez Cuesta) now plays in the most exclusive club in Naples. “With the data, you question the acquired habits and you look at things from a different angle.” It is this that Blair Crump, PROS COO, explained at its Outperform Berlin big data conference. If everyone agrees that we live in the data revolution, “it is primarily about data science, analysis.” And it is in this that there is a revolution: the selection of data that will allow the company to be more competitive.

Big data to optimize prices

It is now an indisputable fact that as the volume of data explodes in companies, it also raises governance issues for some, including data. But now companies that want to use have increasingly precise ideas on what they want or how they can improve their activities. “The use case now is rather clear: customers know what they want but do not yet know how, “says Doug Fuehne, in charge of strategic consulting services for the company. Another constraint: it is necessary to differentiate “consumer expectations: whether to connect with customers rather than customers connect with the company” remarked Blair Crump, COO.

It is a transformation that has engaged HP since 2013, the year from which the manufacturer revised its tariff policy for a large number of products (printers, computers, etc.). “We were too slow to find and set the right prices for our products; not enough responsiveness to the market, making little use of scientific and logical process, too hierarchical,” recalls Maciek Szczesniak, Director of Pricing at HP. Remember: HP had completely revised and streamlined its pricing policy through PROS solutions. “In concrete terms, we find an increase in incoming requests and increase sales,” he concludes.

This issue of pricing is also increasingly crucial for companies, as noted by Chris Fletcher, Gartner analyst. “In 2020, there will be 30 billion connected devices. Everything will go faster, including policies on prices that will become real time: not possible to do that with a simple Excel spreadsheet!”

Adecco and AG2R La Mondiale tested PROS

American company PROS enters the European market through French company Cameleon Software. Now present on the Old Continent, it may already boast excellent references, starting with specialist temporary employment company Adecco. This company conducts business every day with 650,000 businesses with employees, but in 2011 had yet to have a “pricing” department. “At Adecco, we have 5,000 people make decisions on prices from day to day, with many variables to adjust their rates, “says Jean-Marc Guillot, director of the Business Intelligence division. Before starting a price optimization system, Adecco conducted a study with mystery shoppers. It found that “prices were eroding and for similar benefits, they were never the same.” Jean-Marc Guillot considered developing its own management algorithm for prices but quickly gave up. With assistance from PROS, a pilot was launched in June 2014 before being generalized in October and extended to the whole group. Result: automation and harmonization of rates and reduced TAT (time to answer queries).

Like many other companies, Adecco was seduced by the vision of the omnichannel solution from PROS and its interoperability. Indeed, it integrates with leading ERP and CRM solutions, including Salesforce, Microsoft, and SAP. (PROS is also certified HANA). These criteria have also attracted Corinne Dajon, DSI, AG2R La Mondiale, where the problem is another: as of January 1, French companies must offer their employees additional health insurance.

The challenge of complementary general health and AG2R needs are enormous.

First the company must be equipped to prepare its business to provide the best response to companies with high quality customer relationships. The challenge is to provide businesses the means to quickly access the best personalized offers for companies to help them close Sales, and on fixed media or multiple mobile, online and off. “We must have a catalog with offers available everywhere and all the time” explains Dajon, who states that the project was built to handle up to 18,000 quotes a day! AG2R has started working with PROS to demonstrate the benefits internally and the capacity of the tool. All of this is currently operating in the Infrastructure Group, which owns two datacenters of their own. “We have already information that allows us to make developing offers for on the market very quickly. That’s what we were looking for: agility! We improved time to market,” says Corinne Dajon. Omnichannel was central, particularly since we “worked for 3 years on enriching customer knowledge.”